U.S. Treasury Selling Last of Its Citigroup Securities

The U.S. Treasury said it was selling the last of its securities in banking giant Citigroup for an estimated $894 million.

WASHINGTON -- The U.S. Treasury said it was
selling the last of its securities in banking giant Citigroup
on Tuesday for an estimated $894 million, boosting
government profits earned from bailing out the company during
the financial crisis.

The Treasury said the sale will leave taxpayer profit on the
bailout of Citigroup at $13.4 billion.

Citigroup was one of the biggest banks bailed out by the
U.S. government under the Troubled Asset Relief Program, or
TARP, which was launched in 2008 as the financial crisis hit a
fever pitch. The program is widely credited with saving the U.S.
financial system from collapse following a burst housing bubble.

The Treasury said on Tuesday the sale of its Citigroup
subordinated notes would close out its investments in the
company, which once totaled $45 billion.

"Today's transaction is part of our continuing efforts to
wind down TARP's bank investment programs," Treasury Assistant
Secretary Tim Massad said in a statement.

The notes priced for sale on Tuesday were part of a
complicated support program under which various government
agencies propped up some of the country's biggest banks.

As the financial crisis accelerated, the agencies agreed to
share potential losses on a $301 billion pool of toxic assets
held by Citigroup.

Citigroup gave both the Treasury and the Federal Deposit
Insurance Corp so-called trust preferred securities, or TruPS,
to compensate for the guarantee. The $894 million the Treasury
expects to receive on Tuesday is for winding down a portion of
those securities.

It wasn't all bad luck for the capital markets this week: Hedge funds had a decent first quarter despite a slowdown in jobs numbers, BlackRock might be heading into new territory as hedge fund managers take a hard look at their counterparties, and the head of the IMF didn't pull any punches when assessing today's global economy. At least we can admire the nice weather and some of the best quotes of the week.